Question 1

This year,Brent by himself purchased season baseball tickets in the exclusive sky club.The price of the tickets was $60,000,and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother) .Has Brent made a taxable gift and,if so,in what amount?

Accepted Answer

A)  Brent made a taxable gift of $45,000.
B)  Brent made two taxable gifts of $17,000 each.
C)  Brent transferred the tickets for love and affection so no gift tax is imposed.
D)  Brent made two taxable gifts of $5,000.
E)  None of the choices are correct.F) All of the above
G) A) and B)

Question 2

Grace transferred $800,000 into trust with the income to be paid annually to her spouse,Isaiah,for life and the remainder to Taylor.Calculate the amount of the taxable gifts from the transfers.

Accepted Answer

$785,000.The life estate is not eligible...

Question 3

A present interest is the right to currently enjoy property or receive income payments from property.

Accepted Answer

A) True 
 B)False

Question 4

Jonathan transferred $90,000 of cash to a trust this year for the benefit of Hannah,age 10.The trustee has the discretion to distribute income or corpus (principal) for Hannah's benefit and is required to distribute all assets to Hannah (or her estate) not later than Hannah's 21st birthday.What is the amount of the taxable gift?

Accepted Answer

A)  $90,000.
B)  $75,000.
C)  $64,000.
D)  zero-there is no complete gift until the trustee makes a distribution from the trust.
E)  None of the choices are correct.F) A) and D)
G) D) and E)

Question 5

At his death Trevor had a probate estate consisting of $4 million of property.Which of the following is a true statement about Trevor's estate or estate tax?

Accepted Answer

A)  Trevor must have a taxable estate of at least $4 million.
B)  Trevor must have an adjusted gross estate of at least $4 million.
C)  Trevor must have an estate tax base (cumulative taxable transfers) of at least $4 million.
D)  Trevor must have a gross estate of at least $4 million.
E)  None of the choices are necessarily true.F) All of the above
G) C) and D)

Question 6

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice,once under the gift tax and again under the estate tax.

Accepted Answer

A) True 
 B)False

Question 7

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Accepted Answer

A)  A marital deduction and a deduction for casualty losses.
B)  A marital deduction for transfers of all terminable interests.
C)  The tax rate schedule for calculating gross transfer taxes.
D)  A charitable deduction and an annual exclusion.
E)  None of these choices list characteristics common to both the gift and the estate tax.F) B) and E)
G) B) and D)

Question 8

Andrew and Brianna are married and live in Texas,a community-property state.For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters,and Brianna gave $34,000 to her niece.What is the amount of Andrew's taxable gifts?

Accepted Answer

A)  $2,000.
B)  $10,000.
C)  $25,000.
D)  zero only if Andrew and Brianna elect to split gifts.
E)  None of the choices are correct.F) All of the above
G) A) and B)

Question 9

Which of the following statements is (are) true?

Accepted Answer

A)  The same transfer tax rate schedule is used to calculate both the estate tax and the gift tax.
B)  The transfer tax rate schedule is regressive in nature.
C)  The amount of the applicable credit varies according to whether the taxable transfer is inter vivos or testamentary.
D)  The exemption equivalent automatically offsets transfers in calculating cumulative taxable transfers.
E)  All of the choices are true.F) B) and C)
G) A) and D)

Question 10

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Accepted Answer

A) True 
 B)False

Question 11

Jayden gave Olivia a ring when she agreed to marry him.The ring is a family heirloom valued at $68,000.What is the amount of the taxable gift?

Accepted Answer

A)  $0-the marital deduction offsets the gift as long as Jayden and Olivia are married by year-end.
B)  $53,000.
C)  $68,000.
D)  $0-this transfer is not gratuitous.
E)  None of the choices are correct.F) A) and E)
G) None of the above

Question 12

The marital and charitable deductions are common to both the estate tax and the gift tax formulas.

Accepted Answer

A) True 
 B)False

Question 13

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Accepted Answer

A)  An applicable credit and a marital deduction.
B)  A charitable deduction and an annual exclusion.
C)  A gift-splitting election and a deduction for income taxes paid by the fiduciary.
D)  A charitable deduction and the unused spousal exemption equivalent.
E)  All of these choices are characteristics common to both the gift and the estate tax.F) None of the above
G) A) and E)

Question 14

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Accepted Answer

A) True 
 B)False

Question 15

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren.How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Accepted Answer

$300,000.Isaac and his spouse can gift a...

Question 16

At his death Titus had a gross estate consisting of $6 million of property.Which of the following is a true statement about Titus' estate or estate tax?

Accepted Answer

A)  Titus must have a probate estate of at least $6 million.
B)  Titus must have an adjusted gross estate of at least $6 million.
C)  Titus must have cumulative taxable transfers of at least $6 million.
D)  Titus must have a tentative transfer tax calculated on at least $2 million of transfers.
E)  None of the choices are necessarily true.F) C) and D)
G) B) and E)

Question 17

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Accepted Answer

A)  An applicable credit of up to $15,000 per donee per year reduces the tax on any transfer.
B)  An annual exclusion offsets any transfer up to $15,000.
C)  An election can be made to split a transfer between spouses.
D)  A charitable and a marital deduction are allowed in computing the taxable transfer.
E)  All of the choices are true.F) A) and B)
G) All of the above

Question 19

Both spouses must consent to any gift-splitting election.

Accepted Answer

A) True 
 B)False

Question 20

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters.The three daughters share income equally for five years and then the corpus of the trust is to be divided equally among them.What is the amount of the taxable gifts,if any,made by Christian?

Accepted Answer

A)  $60,000.
B)  $46,000.
C)  $34,000.
D)  $18,000.
E)  None of the choices are correct-the amount of the taxable gifts cannot be ascertained without valuing each income interest.F) C) and D)
G) D) and E)

Exam 25: Transfer Taxes and Wealth Planning

The marital and charitable deductions are common to both the estate tax and the gift tax formulas.

Correct Answer
verified

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Correct Answer
verified

At his death Titus had a gross estate consisting of $6 million of property.Which of the following is a true statement about Titus' estate or estate tax?

Correct Answer
verified

Grace transferred $800,000 into trust with the income to be paid annually to her spouse,Isaiah,for life and the remainder to Taylor.Calculate the amount of the taxable gifts from the transfers.

Correct Answer
verified
$785,000.The life estate is not eligible...
View Answer

This year,Brent by himself purchased season baseball tickets in the exclusive sky club.The price of the tickets was $60,000,and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother) .Has Brent made a taxable gift and,if so,in what amount?

Correct Answer
verified

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice,once under the gift tax and again under the estate tax.

Correct Answer
verified

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Correct Answer
verified

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Correct Answer
verified

Correct Answer
verified

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Correct Answer
verified

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren.How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Correct Answer
verified
$300,000.Isaac and his spouse can gift a...
View Answer

A present interest is the right to currently enjoy property or receive income payments from property.

Correct Answer
verified

Andrew and Brianna are married and live in Texas,a community-property state.For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters,and Brianna gave $34,000 to her niece.What is the amount of Andrew's taxable gifts?

Correct Answer
verified

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Correct Answer
verified

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Correct Answer
verified

Which of the following statements is (are) true?

Correct Answer
verified

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters.The three daughters share income equally for five years and then the corpus of the trust is to be divided equally among them.What is the amount of the taxable gifts,if any,made by Christian?

Correct Answer
verified

Both spouses must consent to any gift-splitting election.

Correct Answer
verified

Jayden gave Olivia a ring when she agreed to marry him.The ring is a family heirloom valued at $68,000.What is the amount of the taxable gift?

Correct Answer
verified

At his death Trevor had a probate estate consisting of $4 million of property.Which of the following is a true statement about Trevor's estate or estate tax?

Correct Answer
verified

Exam 25: Transfer Taxes and Wealth Planning

The marital and charitable deductions are common to both the estate tax and the gift tax formulas.

Correct AnswerverifiedShow Answer

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Correct AnswerverifiedShow Answer

At his death Titus had a gross estate consisting of $6 million of property.Which of the following is a true statement about Titus' estate or estate tax?

Correct AnswerverifiedShow Answer

Grace transferred $800,000 into trust with the income to be paid annually to her spouse,Isaiah,for life and the remainder to Taylor.Calculate the amount of the taxable gifts from the transfers.

Correct Answerverified$785,000.The life estate is not eligible...View AnswerShow Answer

This year,Brent by himself purchased season baseball tickets in the exclusive sky club.The price of the tickets was $60,000,and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother) .Has Brent made a taxable gift and,if so,in what amount?

Correct AnswerverifiedShow Answer

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice,once under the gift tax and again under the estate tax.

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Correct AnswerverifiedShow Answer

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Correct AnswerverifiedShow Answer

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren.How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Correct Answerverified$300,000.Isaac and his spouse can gift a...View AnswerShow Answer

A present interest is the right to currently enjoy property or receive income payments from property.

Correct AnswerverifiedShow Answer

Andrew and Brianna are married and live in Texas,a community-property state.For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters,and Brianna gave $34,000 to her niece.What is the amount of Andrew's taxable gifts?

Correct AnswerverifiedShow Answer

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Correct AnswerverifiedShow Answer

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true?

Correct AnswerverifiedShow Answer

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters.The three daughters share income equally for five years and then the corpus of the trust is to be divided equally among them.What is the amount of the taxable gifts,if any,made by Christian?

Correct AnswerverifiedShow Answer

Both spouses must consent to any gift-splitting election.

Correct AnswerverifiedShow Answer

Jayden gave Olivia a ring when she agreed to marry him.The ring is a family heirloom valued at $68,000.What is the amount of the taxable gift?

Correct AnswerverifiedShow Answer

At his death Trevor had a probate estate consisting of $4 million of property.Which of the following is a true statement about Trevor's estate or estate tax?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
$785,000.The life estate is not eligible...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$300,000.Isaac and his spouse can gift a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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